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In
the absence of a line of communication with
the bureaucrats in Brussels, CMA CGM is
doing what it can through vessel sharing
agreements and other arrangements to improve
stability in this turbulent time.
One
area of focus is long term contracts.
This
is a topic that we have often discussed
in the past but all too often the intention
to create stability through long term contracts
is there, but they often fail in application.
This
largely hinges on issues related to minimum
quantity commitments demanded by carriers
and movements in spot market freight rates.
But
for CMA CGM, it is achieving considerable
success in getting its customers to not
only enter into such agreements, but also
getting them to stick to the conditions
laid out in the contracts.
The
carrier's ultimate aim to have as much as
50 per cent of its business handled through
secure long term contracts.
"We
deal with big retail companies. If they
have to go through discussions every six
months, or every three months, it is going
to be difficult for them and us. We will
be spending too much time negotiating and
arguing about rates. They have other things
to do and we do too," Mr Saade said.
"I
think it is definitely a trend that we as
a shipping line would like to pursue with
customers, and I would say that more and
more [customers] will look for contracts
of one year and more," he added.
It
will be no easy task, but in difficult times
like this where both the shipping lines
and their customers are suffering, perhaps
the idea will finally take off.
As
for creating stability in this naturally
unstable business, this will take a much
greater effort.
CMA
CGM's efforts in this regard are to be commended
and with the likes of Maersk now also joining
the fray to push for greater market stability
through a far more conservative approach
to its operations, perhaps the outlook for
container shipping needn't be as bleak as
what the media and market analysts are insisting
on.
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